It is an extremely complicated question in today’s world of international finance: In our cash-less society, where exactly is money held?
This is the key question facing a U.S. judge, who could require the Frankfurt-based stock exchange operator Deutsche Börse to hand over to U.S. authorities some $1.67 billion in funds it is holding for Iran’s central bank.
“It’s interesting because probably 200 years ago this would be a fact question, and now it is a law question,” Judge Katherine B. Forrest of the Southern District of New York, said in a transcript of the case seen by Handelsblatt Global Edition.
The ongoing court case, originally reported by the news agency Reuters, marks a major new test of the reach of U.S. laws abroad. The money in question is held by Clearstream, a clearing and settlement house wholly owned by Deutsche Börse, in Luxembourg.
Experts suggest Deutsche Börse may have no choice but to settle the case. Even if it could challenge the U.S. decision in European courts, it may not be worth the effort.
“Clearstream may want to protect its commercial interests in the United States,” Gilles Cuniberti, a law professor at the University of Luxembourg, told Handelsblatt Global Edition. “At some point, Clearstream may put its commercial reality above legal proceedings.”